REFAYET ULLAH MIRDHA

Bangladesh’s reliance on Indian imports has been increasing as local manufacturers and industries are struggling to reduce the time needed to bring in goods from other destinations as they battle to meet shrinking lead times.

If local manufacturers import raw materials from China, Latin America or Africa, they lose their competitive edge in the global supply chain, especially as international retailers and brands have lately shortened lead times.

The import of Indian goods, especially cotton, fabrics and yarn, has been increasing since July last year, when political and labour unrest disrupted export-import activities and led to a halt in production across many factories.

According to Bangladesh Bank data, imports from India increased by 2.09 percent to $2.36 billion in the October-December quarter of 2024, a year-on-year increase from the $2.04 billion recorded the year prior.

In FY24, the total import value of Indian goods to Bangladesh was $9 billion and in the FY23 the import value from India was $9.94 billion, central bank data showed.

In the first six months of the current fiscal year, the total import value from India remained on the same trajectory, hitting $4.41 billion. However, given the increasing flow of imports, it may exceed last year’s number.

Cotton is among the major commodities imported from India. Bangladesh imports cotton worth more than $3 billion each year, with more than half coming from India. In FY23, imports of Indian cotton stood at $1.92 billion and climbed to $2.36 billion in FY24.

Other major commodities imported by Bangladesh from India include cotton yarn, fabrics, handloom products, and organic and inorganic chemicals.

Importers said increased trade through formal channels played a role in the rise, informing that trade through informal routes dropped significantly due to improved border vigilance by both countries.

Yet, the main reason for rising imports from India is the fact that it allows companies to preserve the most valuable commodity of all: time.

Competition in the global supply chain intensified in the aftermath of the Covid-19 pandemic, Russia-Ukraine war and high global inflation, leading international clothing retailers and brands to halve lead times from 90 days to 45 days.

But if local garment exporters import cotton from Africa, Latin America, Australia or the US, it takes at least 35 days to arrive at the Chattogram port before taking another 15 days or so to reach the mills.